Factions Square Off in Battle for Electric Car Future

Ford CEO Alan Mulally grabs every available photo opp with an electric car, but says pure electric cars don't make economic sense and are a "longer-term journey."

As we’ve explored many times before on this site, electric cars are a political lightning rod for strong views about the future of energy, the environment and sustainable transportation in the United States. In 2005, James Woolsey, the Volt-driving EV-promoting former CIA director, called for a new broad-based coalition to move toward vehicle electrification. Woolsey said the coalition would be made up of “tree huggers, do-gooders, sodbusters, and cheap hawks—people like me who want to reduce the leverage of Middle East countries, and win this long war on terrorism with as little shooting as possible.”

Unfortunately, based on news from the first weeks of this second year of the new wave of electric cars, any fledgling coalition has started to break into deeply divided factions. I’ll take a stab at defining the camps.

Anti-EV Republicans and Media: As Randy Essex and Ben Holland from the Rocky Mountain Institute aptly pointed out a couple of weeks ago, electric cars are under attack by conservative politicians and media pundits with “flawed narratives” about EVs. The most vocal electric car critics look at sales of 17,000 EVs in 2011 as proof-positive that there’s no market for plug-in cars—and are calling for a repeal of tax consumer credits. The RMI authors write, “The [incentives] are under fire—even as gas prices jumped because of Iran’s threats to close the Strait of Hormuz, a chokepoint in global oil trade.” They warn that we “can’t necessarily count on Congress to guide [our] energy future." They say we should be aiming to end America’s fossil fuel dependency by 2050, but instead we are bickering over “short-term incentives and outcomes and putting innovation in a shooting gallery because it didn’t take over the US vehicle market in its first year.”

Obama Administration: Of course, the attacks have put the Obama Administration on the defense—especially regarding its goal of getting 1 million plug-in cars on the road by 2015. Earlier this month, Department of Transportation Secretary Ray LaHood adamantly defended the tax credit, stating, "The program has worked. It's real money and people have utilized it." Administration officials see the credit as essential to the goal of reducing emissions and slashing our dependency on foreign oil—and show no sign of backing down on the 1 million number (which after all is a fairly arbitrary and aspirational figure). The “shooting gallery” will continue to get louder. Just this week, General Motors CEO Dan Akerson agreed to testify before a US House subcommittee about the much-overblown Chevy Volt battery fire issue, which is being used to instill fear of the technology.

Auto Industry: With the exception of Nissan (and General Motors to some degree), auto companies are speaking out of both sides of their mouth when it comes to electric cars and plug-in hybrids. In one moment, they triumphantly roll out enticing electric concept vehicles at major shows, or release limited-run vehicles produced in numbers just high enough to meet California zero-emission mandates (but dismally low by market standards). In the next moment, they question the viability of EVs.

Chief among the double-talkers is Alan Mulally, Ford’s CEO. Fresh from selling its first Focus Electric, and days before announcing that it will produce a plug-in hybrid version of the Fusion sedan (to sell along with its C-Max Energi crossover plug-in hybrid), Mulally backtracked. “The infrastructure is just not there yet,” Mulally told Newsweek. He said that EVs are a “very tough economic case.” In a statement nearly identical to what Honda President Takanobu Ito told me at this year’s Tokyo Motor Show, he said gas hybrids and more efficient internal combustion engines are a better option. “The ones that make the most economic sense are the hybrids, like the Escape and Fusion hybrid,” Mulally told Newsweek, because they “have no limitation on range. It isn’t going to get in the way of your lifestyle—you know, whether you can charge it or not.” (Ironically, Ford will not offer a hybrid version of the 2013 Ford Escape SUV.)

These kinds of statements embolden media to make statements like this one from Daily Beast/Newsweek. In the piece covering Mulullay’s view of EVs,Joanne Lipman, Newsweek's C-Suite columnist, wrote, “It’s hard not to think that Obama is looking a lot like the last guy to buy an eight-track tape player, championing exactly the wrong technology at the wrong time.” Wha? Internal combustion is the future, and electric cars are eight-track players?

EV Drivers and Advocates: As usual, the folks driving electric cars are rarely consulted or quoted. While outsiders might expect citizens behind the wheel of battery-powered cars to vociferously demand an immediate EV revolution, I believe electric car drivers have the most accurate view of the situation. The benefits of EVs are abundantly clear—fun to drive, no tailpipe emissions, lower maintenance cost, breaking our relationship with gas stations and oil wars, etc.—but we aren’t driving with rose-colored glasses on. As Chelsea Sexton, long-time EV spokeswoman, pointed out via Twitter yesterday, there’s not a single new electric car or plug-in hybrid launching this year that will sell in numbers greater than the Nissan LEAF sold in 2011.

Comments

I knew we would see unwarranted negative press around BEVs and PHEVs, but I assumed it would be 80% positive versus 20% negative. However, for the last several months, it's been more like 20% positive and 80% negative. The reality is that the LEAF, for example, has proven itself to meet the needs of the vast majority of consumers. So the question of if it will work is now off the table. And, by the way, the LEAF is already outselling 15 other name plates, as this article points out.

So what's the issue? Well the forces who would benefit from the EV failing are united. The problem is that the forces who stand to benefit, in a big way, from EVs are by and large MIA. Where are the electrical utilities in this? Utilities have an opportunity to sell a lot more electricity to EV owners. But they are actually doing very little to spur the market. Utilities should each have an entire fleet of EVs and PHEVs. Utilities should have incentives to get their employees to purchase EVs and PHEVs (free on site charging, negotiated discounts, etc). Utilities should work to get the tariffs right for fast charging networks. Utilities should run a positive EVs and PHEVs ad campaign. Don't the utilities want to sell more electricity?

The next major group MIA are the local governments. Money spent on gasoline tends to leave the community, whereas money spent on electricity tends to stay more local. By that I mean the electrical plants are typically local, employees are local, etc. Also, because it's cheaper to operate an EV, people have more disposable income to spend locally.

The auto companies are also, by and large, MIA. We saw a lot of Nissan ads when you couldn't purchase a LEAF, but very few once you could. Also, we have yet to see the actual first derivative EV and PHEV in production. Where's the Cadillac ELR or Nissan ESFLOW? And lastly, their messages are all over the place. Consumers want to know the auto companies are in the EVs and PHEVs market for the long run before they embrace it.

This is an election year and so a lot of analysts do logic backflips about a lot of things. Not doubt it will get worse until after the election.

The most important thing for us to protect is the $7,500 tax credit. This is the main bridge that allows us to cross over the low volume and thus high early costs of cars that have large battery packs (and other electronics).

If we can keep the tax credit in place until the production volume of EVs gets to a reasonable spot then the advantages of EVs will win the day in much the same way that smart phones won over land lines. There are just too many advatages to an EV for EVs to loose once they work their way up to a level playing field. Which will take a few years to do.

Yeah, I get the feeling this is a repeat of 2000. Honda and Ford are waiting to see who wins in November to decide whether or not to make EVs. Only, EVs are globally sold now, so the same rules don't quite apply.

· Norbert (not verified) · 3 years ago

Nissan's goal for 2012 Leaf production is 20,000 in the US, Tesla's 5,000, and a few Totyota RAV4 EVs, plus iMievs, perhaps close to 30,000 pure EVs, plus some Focus (Ford Focus, that is). Plus a more unkown (to me) amount of PHEVs. Not too bad in my opinion, if Nissan come as close to its goal as it did this year, given that Nissan's US factory isn't open yet, and Tesla will ramp up only in 2013. Just make clear we consider that a success. ;) I'm not melodramatic about these numbers (yet ;) ).

What about the potential shift in consumer preference if gas meets/exceeds $5/gallon this year? People will start putting more effort into exploring alternative vehicles once they are shaken out of the status quo of ~$4/gallon.

Good review of the situation, Brad. FWIW we also need to consider Big Enviro. EVs are simply better from an enviro POV, but the big organizations haven't made this clear to their constituency for a variety of reasons too long to list here. Has any big green org loudly told its members we should celebrate and buy these cars that don't have tailpipe emissions or use petroleum?

Oil is an international thing these days. The US market is no longer the main force behind gas prices. Nor will added production of oil in the US make much difference on these world market driven prices even if we suddenly decided to drill under every stone.

Analysts are now talking about $4 gas by the summer and possibly $5 gas by the end of the year.

Canadian oil sands will have some impact on keeping a lid on prices for a little while. There is a lot of oil there. But it is expensive oil to get and it is the worst oil for the environment, locally and globably, that humans have ever touched, by a wide margin.

And ultimately even the Canadian oil sands cannot keep up with growth in demand from China, India, South America, etc.

· Sunpowered (not verified) · 3 years ago

Its funny that we are now exporting our subsidised US oil. Why are they still screaming drill baby drill. I dont trust any of them and Im not going to wait. My Model S is on order. My solar panels are installed. Breaking free in July.

· jim1961 (not verified) · 3 years ago

I have some good news that might annoy some conservatives. When the primary season is over all the smart Republican candidates will run toward the political center. They need the support of independent voters in the general election and they know it. I doubt there will be any serious effort to eliminate the EV tax credit.

@Marc - Do you care which enviro group should step up re EVs? Which is more likely? Which would you like to see do it? Maybe we could devise an online campaign targeted at the very people who spend the most amount of time on online campaigns, the enviros. Get, say, a few thousand EV owners to send emails (over and over if necessary) to Michael Brune at the Sierra Club, explaining why they should put their resources to push EVs, and demanding that they do it.

· joe8120 (not verified) · 3 years ago

Ironic, indeed. I was waiting to purchase a redesigned 2013 Escape hybrid hopefully in plug-in form. Unfortunately, Ford dropped the hybrid from the line-up and I've read will try to steer customers to the C-Max hybrid instead. This won't be an option for me since I needed a vehicle with 4WD. So I purchased a 2012 Escape hybrid 4WD which fits the bill. I will convert it to a plug-in once battery prices decline and the conversions lower in price. It is a fine vehicle and I really like it. Ford makes the argument that the new eco-boost engines will get better hiway mileage than the hybrid but make no mention of city mileage which wont't come close. I like the styling of the 2013 model but I think Ford is dropping the ball insofar as no hybrid version of the new Escape.

My wife's grandfather is a staunch republican, bordering on crazy and he HATES anything hybrid or EV. I keep forgetting that whenever I talk about these cars. He would scoff and ask me "They get what? 30 miles?"

His best rebuttal for why he hates EV's and hybrids.... It's because he thinks they're too quiet and they are dangerous because of that. /facepalm.

· Eric (not verified) · 3 years ago

Why all the Bad Press, "First They Ignore You, Then They Laugh at You, Then They Fight You, Then You Win" - Gandhi. We are in the They Fight You Stage. Anyone with a Spreadsheet and Planning on Living and Driving a car for 30 Plus years can easily tell you the Economic benefit of Going Solar (Fixed Cost) and Electric Cars, using 2012 Technology. Knowing full well Ten Years from now the Technology will be even Better and Cheaper. Big Oil, which Finances Car Companies, Big Media, Politicians directly and Indirectly through their Funding of Big Banks, can use a Spreadsheet Too! They will not sit by and loose Trillions of Dollars of EASY Money over the next Decades because people want to actually Own their Power (Solar) and totally avoid the Oil Industry, let alone try not too harm the planet. "..Get in the way of your lifestyle..", Really? I have owned a Gas Powered car for 20+ year and every year I routinely use multiple forms of Transportation (Airplane, Boat, Train, RENTAL CAR, Bus, Car Pool, etc.), based on travel Needs, instead of my Gas Powered Car, so how will Driving a Electric Car be any Different? Going Solar (PV and Heat) 2012, Model S 2012, Plug in Hybrid for Wife in 2013. Don't Let Big Oil in Sheep's Clothing fool you!

· bryan38401 (not verified) · 3 years ago

ok i finally get my leaf tomorrow!! because ford wont sell me a transit electric because im not in the( target market).i have 4 work trucks and 3 family vehicles it cost me 1700.00 per wk in gas!! not any more!!! im am installing charging stations at every location my family or trucks will be using and have my local towing company set up with a road side assitance station.i have 4 trucks ordered ev only and will pick 2 more family cars.and geuss where my stations are at.GAS stations why you might ask because they are not making any money selling gas!! they want evs! hint to marketing those who are willing and wanting evs ARE your market!

· bryan38401 (not verified) · 3 years ago

ok i finally get my leaf tomorrow!! because ford wont sell me a transit electric because im not in the( target market).i have 4 work trucks and 3 family vehicles it cost me 1700.00 per wk in gas!! not any more!!! im am installing charging stations at every location my family or trucks will be using and have my local towing company set up with a road side assitance station.i have 4 trucks ordered ev only and will pick 2 more family cars.and geuss where my stations are at.GAS stations why you might ask because they are not making any money selling gas!! they want evs! hint to marketing those who are willing and wanting evs ARE your market!

Many people in Australia are saying that Electric Cars are the future.

Also, in my opinion, I get the perception that many in the V8 muscle car community like EVs because it means when other people use EVs, there will be more gasoline and ethanol available for their V8s. Many people in the V8 muscle car community have been positive of my Electric Go Kart and of Electric Cars. Some of them may not want to drive an Electric Car, but they are not against others who do.

· priusmaniac (not verified) · 3 years ago

When 500 million cars are using 4 billion barrels a year at 100 $/barrel, there is indeed a very strong incentive to try to cancel or retard as much as possible any EV or plug-in. That can explain a lot of the so called negative media.